Trading of Tokenized Real Estate on the Blockchain

 

Types of tokens according to their legal classification:

Utility tokens: unregulated tokens, as they are utility or usage assets, platform usage requirements, discounts, and loyalty points when purchasing, but never give a return (a % annual profit). Examples:

  • BNB is Binance native toke.

  • ETHER is the Ethereum native token.

Security Tokens: regulated tokens are financial assets because they represent a real asset, either tangible or intangible. For example:

  • Investment tokens such as "Enegra Group Token" EGX, has a price of USD 183/token and a market cap of USD 15,527 million.

  • Another investment token is "Blockchain Capital Token" BCAP, it has a price of 14.94 USD/token and a market cap of 105 million USD.

To issue Security Tokens, you must follow certain procedures with the regulatory body in the country where the issuance will take place.

Equity Tokens: represent shares of a company. It is important to know that they will only have free transfer if the capital company law of that country allows it. For example:

  • Binance, within its offering to its users, offers a COIN (Coinbase's ticker on Nasdaq) stock token.

  • In Spain, limited liability companies do not have free transfer and cannot be tokenized, but public limited companies can.

  • In the United States, limited liability companies (LLCs) can be tokenized.

Tokenize real estate in the USA:

In the United States, the ideal is to create an LLC (the opening process takes 24 hours) and tokenize the company. The shareholders buy the property in the name of the tokenized company and this process is repeated by the shareholders with each property.

In this way, investors hold tokens of a company whose only asset is that property. This is possible because company formation in the United States is extremely fast, simple, and low cost.

Realt.co is an example of a Fractional Real Estate Investment in the United States:

  • The expected income depending on the property ranges between 9 and 12%, equal to the net rent divided by the total investment. It does not include potential income from the increase in the property's value.

  • Each property has its respective token with its price and yield.

  • Real Estate Token Economy: 2911 Sturtevant St, Detroit, MI 48206.

Tokenize real estate in Spain:

In Spain, the process is different and what is tokenized is the debt necessary for the acquisition of the property, so that the investors who provide the capital receive tokens that represent participating loans. They receive an interest rate agreed with the issuer of the tokens.

It is a Security Token and in the case of Spain, in order to issue it, an informative brochure must be prepared, and signed by an EAF (agent or financial advisory company) authorized by the CNMV (National Securities Market Commission). This process is fast, especially if the aim is to develop a platform to tokenize real estate, this prospectus is reused simply by changing the data of the property.

Reental.co is an example of a tokenized investment in Spain:

It brings the best real estate investment opportunities in Spain. Invest in European assets with the best dividend/risk ratio in the market from 100 euros, with returns of over 26% in 24 months (13% per year) and guaranteed liquidity from the start. How it works:

a)     Select the best properties to buy.

b)    Tokenize the necessary loan to acquire it.

c)     Distribute the monthly dividends of the rented property.

d)    Sell the property after 2 years, obtaining capital gains.

e) See more on website.

  • Real estate token economy: C/ Vicente Sanchiz 28B, Villarreal

 
Carlos Sampson